Edge of the Deindustrialization Issue, the Ministry of Industry Announces More Aggressive Industrial Investment Data

By : Ridwan And Aldi Firhand. A | Monday, September 03 2018 - 23:24 IWST

Illustration Manufacturing Industry (Photo Dok Industry.co.id)
Illustration Manufacturing Industry (Photo Dok Industry.co.id)

INDUSTRY.co.id - Jakarta, the Ministry of Industry has rejected accusations that Indonesia is experiencing deindustrialization. Because, investment in the manufacturing sector at home and abroad is still aggressive so that the number of manufacturers continues to grow and there is an increase in employment.

"We are optimistic, the industrial sector is still and will continue to experience growth. Moreover, the government is currently focusing on transforming the economy towards an industry-based country," said Head of the Ministry of Industry's Industrial Research and Development Agency (BPPI), East Asia in Jakarta, Monday (3 / 9/2018).

Therefore, according to Ngakan, the government is committed to creating a conducive investment climate, such as through the provision of fiscal incentives and ease of business licensing.

"Along with these efforts, we carry out a downstream policy to encourage the industry to create high added value to domestic raw materials so that it can generate foreign exchange from exports," he said.

Ngakan asserted, in the eyes of the international community, Indonesia is seen as one of the largest industrial countries in the world. This is based on the report of the United Nations Industrial Development Organization (UNIDO) which shows that Indonesia is ranked 9th in the world as the largest producer of added value from the industrial sector.

In addition, when viewed from the percentage of industry contribution, Indonesia is ranked among the top 4 in the world.

"Indonesia also experienced an increase in the Global Competitiveness Index, which currently has increased to 36th from the 41st rank," he added.

Referring to the Central Statistics Agency (BPS) data, the processing industry is the largest contributor to the national Gross Domestic Product (GDP) with a value reaching 19.83 percent in the second quarter of 2018. While for the growth of the non-oil and gas processing industry, it is at 4.41 percent, higher than 3.93 percent in the same period last year.

The sectors that underpin the growth of the non-oil and gas processing industry in the second quarter of this year include the rubber industry, goods from rubber and plastics which grew by 11.85 percent, followed by the leather industry, leather goods and footwear by 11, 38 percent.

Furthermore, the growth of the food and beverage industry penetrated 8.67 percent, and the textile and apparel industry reached 6.39 percent.

"The performance of the manufacturing sectors is able to surpass national economic growth. So that the manufacturing sector is often referred to as the spearhead of Indonesia's economy because of its contribution to 18-20 percent," said Ngakan.

In addition, throughout 2017, the manufacturing industry contributed 74.10 percent or the highest contributor to Indonesia's export structure with a value of USD125.02 billion. From the results of the downstream program, the export ratio in the 2015-2017 period, downstream products dominated by 78 percent, the rest were upstream products.

As the industry grows, this sector also plays an important role in employment. In 2010, there were 13.82 million workers in the industrial sector, rising to 17.5 million workers in 2017.

The industrial sector also contributed significantly to the growth of investment value in the first semester of 2018. The total investment from manufacturing groups reached Rp122 trillion through 10,049 projects or contributed 33.6 percent of the total investment value of Rp361.6 trillion.

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